Greenwave Technology Solutions, Inc., a company that has transitioned from a technology platform developer to a key player in the scrap metal industry, has released its annual 10-K report. The report provides a comprehensive overview of the company’s financial performance, business operations, strategic initiatives, and the challenges it faces in the current market environment.
Financial Highlights
Revenues: $33.32 million, a decrease of $2.35 million (6.59%) from the previous year, primarily due to inventory accumulation in anticipation of metal tariffs.
Gross Profit: $12.99 million, a decrease of $1.49 million (10.31%) from the previous year, with gross margins decreasing to 39% from 41% due to inventory accumulation.
Loss from Operations: $(34.26) million, an increase in loss by $14.75 million (75.57%) compared to the previous year, driven by increased operating expenses.
Net Income (Loss) Available to Common Stockholders: $(100.45) million, an increase in loss by $66.85 million (198.97%) from the previous year, impacted by significant other income and expenses.
Business Highlights
Business Transition: Greenwave Technology Solutions, Inc. transitioned from a technology platform developer to a scrap metal industry player following the acquisition of Empire Services, Inc. in October 2021. This acquisition expanded their operations to include 13 metal recycling facilities across Virginia, North Carolina, and Ohio.
Operational Capabilities: The company operates two American Pulverizer 60×85 automotive shredders located in Kelford, North Carolina, and Carrollton, Virginia. These shredders are designed to produce denser and more refined recycled ferrous metals, enhancing the value of the recycled steel products.
Product Lines: Greenwave processes and sells both ferrous and nonferrous metals. Ferrous metals are categorized into heavy melting steel, plate and structural, and shredded scrap. Nonferrous metals include aluminum, copper, stainless steel, and more. The company also sells catalytic converters from end-of-life vehicles.
Technology Integration: In September 2023, Greenwave launched ScrapApp.com, a platform for buying end-of-life vehicles directly from individuals. As of March 2025, the app has facilitated the purchase of over 1,200 vehicles and is operational in 15 markets across several states.
Competitive Landscape: The U.S. scrap metal industry is undergoing consolidation, with major players like Toyota acquiring significant scrap metal companies. Greenwave is positioned among the top 25 scrap yard chains in the U.S., with a strong presence in the Hampton Roads, VA market.
Recent Developments: The company has been actively involved in securities offerings and private placements to raise capital, which includes the January and February 2025 offerings, raising significant funds to support operations and growth.
Future Outlook: Greenwave anticipates benefiting from rising domestic scrap steel prices, which have increased by 32% since early February 2025. The company is poised to expand operations in response to high demand and limited supply in the market.
Strategic Initiatives
Strategic Initiatives: Greenwave Technology Solutions, Inc. transitioned into the scrap metal industry following the acquisition of Empire Services, Inc., which operates 13 metal recycling facilities. The company has focused on maximizing the value of metals produced through advanced processing systems, including the operation of two American Pulverizer automotive shredders. The strategic initiative to accumulate metal inventory in anticipation of future price increases due to expected tariffs is a key focus, aiming to enhance revenue and gross profit margins.
Capital Management: During the year ended December 31, 2024, Greenwave raised $40,369,115 through the sale of common stock and warrants, and $2,834,741 from warrant exercises. The company also managed its financing activities by repaying non-convertible notes, factoring advances, and related-party notes. Despite these efforts, the company faced a working capital deficit and substantial net losses, raising concerns about its ability to continue as a going concern. The company does not anticipate paying dividends in the foreseeable future, opting to retain earnings for operational use.
Future Outlook: Greenwave may require additional capital to execute its business plan and is exploring potential debt or equity financing options. The company anticipates that the accumulated inventory will generate significant revenue and gross profit in early 2025 due to expected increases in metal prices. However, the company acknowledges the challenges posed by its current financial condition and the need for strategic capital management to ensure sustainable operations.
Challenges and Risks
Market Risks: The cyclical nature of the scrap metal industry and sensitivity to economic conditions can materially affect operating results. Changes in global markets, such as tariffs and trade restrictions, may adversely impact financial performance.
Operational Risks: The company is dependent on a small number of suppliers and customers, which poses risks of supply chain disruptions and revenue concentration. Equipment failures and facility damage could lead to production shutdowns.
Regulatory Risks: Compliance with environmental laws and potential liabilities could materially affect financial condition. Changes in tax rules and climate change regulations may also impact operations.
Financial Risks: The company has a history of losses and may need additional financing, with concerns about its ability to continue as a going concern. Past material weaknesses in internal controls could impair financial condition.
Stock Risks: The market price of common stock may be volatile, and the company faces potential delisting from Nasdaq if it fails to meet listing requirements.
Management Strategies: Management highlights the impact of accumulating inventory in anticipation of rising metal prices due to tariffs, which affected revenues in 2024. The company is experiencing increased operating expenses due to expansion efforts and capital raises. Management is focused on operational efficiencies and strategic inventory management to mitigate risks associated with market fluctuations.
Market Risk Exposure: The company is exposed to market risks related to fluctuations in scrap metal prices and foreign currency exchange rates. These factors can significantly impact revenue and profitability, especially given the company’s reliance on international markets for a substantial portion of its sales.
SEC Filing: Greenwave Technology Solutions, Inc. [ GWAV ] – 10-K – Apr. 15, 2025
